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114256 MDLIAN 2058

ON HONG KONG, THE PUS EXPLAINED OUR CONTINUING DIFFICULTIES. HE SOUGHT AND WAS PROMISED CONTINUING JAPANESE SUPPORT. OWADA POINTED OUT THAT JAPANESE INVESTMENT IN HONG KONG WAS BUOYANT AND HE WAS OPTIMISTIC ABOUT THE ECONOMIC PROSPECTS IN SOUTHERN CHINA.

ANALYSES OF THE SITUATION IN PEKING WERE VERY SIMILAR. BOTH SAW

A CONTINUING NEED TO SHAME THE CHINESE INTO BEHAVING RESPONSIBLY ON PROLIFERATION AND OTHER INTERNATIONAL ISSUES AND TO KEEP OPEN THE CHANNELS OF DIALOGUE WITH THEM.

COMMENT

4 -

THIS WAS A PARTICULARLY USEFUL VISIT IN KEEPING UP OUR BILATERAL DIALOGUE, GIVEN THE SLIGHT GAP IN SENIOR MINISTERIAL VISITS AT THIS TIME. OWADA SPENT NEARLY 22 DAYS WITH THE PUS AND CLEARLY ATTACHED A VERY HIGH PRIORITY TO ENSURING THAT IT WENT WELL. DETAILED ACCOUNTS OF THE DISCUSSIONS WILL FOLLOW BY TELELETTER. THEY CONFIRMED THAT AS FAR AS FOREIGN POLICY COOPERATION IS CONCERNED, OUR RELATIONSHIP CONTINUES TO BE CONSTRUCTIVE AND ACTIVE.

WHITEHEAD

YYYY

DISTRIBUTION

210

ΜΑΙΝ

171

.JAPAN POLITICAL AND ECONOMIC

RMD

.(BACKGROUND)

SEAD

LIMITED

CSAD

FED

NENAD

PUSD

HKD

INFO D

PS

AMD

HD/CRD

ECD (E)

ECD (I)

ECD (P)

ECONOMIC ADVISERS

PS/LORD CAITHNESS

PS/MR LENNOX-BOYD

PS/PUS

MR APPLEYARD

CHIEF CLERK

MR BAYNE

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